140

Journal of the Indian Academy of Applied Psychology

January 2011, Vol.37, No.1, 140-148.

Transformational Leadership and Innovative Work Behaviour

Bishakha Majumdar and Anjali Ray

University of Calcutta, Kolkata
The study focuses on the nature of the transformational leadership styles and
also the relationship between transformational leadership and innovative work
behaviour of branch managers of the public and private-sector banks of Kolkata.
Data was collected from 120 male branch managers of Kolkata (60 from public-
sector banks and 60 from private-sector banks), using the General Information
Schedule, Transformational Leadership Questionnaire and Innovative Work
Behaviour Scale. Responses to these tools were processed for t-test, ANOVA
and correlational analysis. The results show that branch managers of the public
and private-sector banks reveal uniform patterns of moderately high
transformational leadership. Irrespective of the type of bank, the innovative work
behaviour of the branch managers vary in terms of their levels of transformational
leadership. Also, the two dimensions are positively correlated. Idea promotion,
a dimension of Innovative Work Behaviour, is facilitated more by the public-
sector work setting than by the private-sector setting.
Keywords: Transformational Leadership, Innovative Work Behaviour, Financial
Institutions

Globalization increases global connectivity, to pay dividend to the shareholders and

integration and interdependence in social,
economic, technological, cultural political and
ecological spheres. Central to the globalized
interpretation is a conception of the global
change involving a significant transformation
of the organizing principles of social life and
world order. As organization is the mans
society, it is possible for the organization not
only to do the required transformation but
also be able to accept the need for
transformation.
Commercial banking in the modern
sense in India goes back to more than two
hundred years. The main business of banking
consists of taking loans (deposits) and lending
money (credit/advance). What makes
economic sense for a bank is to ensure that
there is an excess of the interest it earns over
the interest it pays to the depositors. The
excess should cover the staff cost and all
establishment expenses, and still have surplus
retain some surplus to improve its own capital.
Since the independence of the country, the
most important thing which has happened to
the Indian banking scene is the nationalization
of the 13 major commercial banks in 1969.
Later, ownership of six more banks transferred
to the government. Nationalization of banks
led to huge growth in branch network and
employment and also to bringing new
business like loans to farmers and small
business industry into the banking arena.
In the 1990s, the process started by
which the government diluted its holding in
most public-sector banks, including the
largest, viz. State bank of India. Thus, instead
of one shareholder, the banks had to take
care of numerous individuals and institutions
- the shareholders who would demand
dividend payment and rise and market value
of the shares held by them. In the 1990s
again, a number of private sector banks